be many special guests looking down on president obama from the balcony's in the house are representatives, including this man, apple ceo, tim cook, who will be sitting with the first lady. reports say the president will likely reference coke and apple for their latest plan to move manufacturing back to the u.s., but that is not the whole story. coke recently announced a plan to make the new macintosh and the u.s., but there are a tiny part of apple's business. apple's primary product, the ipad, iphone account for nearly three-quarters of the company's sales and are all made in china at places like fox con. that's not going to change a time soon. because as steve jobs once said denton cook echoed, you cannot find that many americans to hire. i bet there are just a few american engineers out there that would disagree, but they probably aren't looking at being

paid $18 per day. mr. president, instead of dividing the ceo of the world's biggest company, what you bring in small business owners who are dealing with her policies the in and day out. while they're there may be to listen to what they have to say you. that's my "2 cents more," and that's it for tonight on "the willis report." thank you for joining us. gerri@foxbusiness.com for complete coverage of the president's state of the union address starting in one hour at 8:00 p.m. eastern time with neil cavuto. have a great night. ♪ lou: good evening. president obama tonight to deliver the first-aid of the union address of his second term , a speech in which we are told the president will be aggressive and tough. mr. obama will go against the

national mood and you and despite trillions of dollars of deficits is expected to call tonight for even higher taxes and ever more government spending. these proposals, only two weeks before the sequester, the $85 billion of automatic spending cuts is set to take effect. also, north korea's detonation of a nuclear bomb provoking widespread international condemnation. the north koreans declared an explosion to have been a response to outrageous u.s. hostility. and kate up and eating our -- meeting up in dark to get in fighting off frostbite as she posed for second consecutive sports illustrated swimsuit issue covered. fighting, she drew heart warming inspiration. tonight we begin with the president's "state of the union" address, the president's speech before a joint session of congress expected to include

immigration command-and-control, climate change, and education as key themes. president obama to argue that even more federal spending and higher taxes are necessary to spur job creation and according to white house aides that president is also expected to use his speech to try to turn public opinion against the sequestered even though the sequester was authored by the white house and was agreed to by the president and both political parties in congress. interestingly, with only two weeks before the sequester is set to kick in the president has not even try to talk with a republican leaders about the possibilities of a delay or a new deal to replace the sequester cuts. >> have there been any recent meetings along those lines? >> well, there have not. we had the issue of the end of last year and over the last few weeks we have been preparing in gearing up. the president admitted their numerous times that he welcomes the opportunity to sit down with

the republicans in congress and work out a deal. lou: the president not talking with congress and all indications today at congress has no particular interest in talking with him. according to republican congressional leaders, it is no longer in negotiation if tax hikes are involved. house speaker flat of refusing to discuss extending the deadline passed march 1st and has made it clear he is no longer taking the president seriously on the issues of spending cuts and deficit reduution saying, i don't think he has the guts to do it referring to the president. he does not have the courage to take on a liberal side of his own party, never has. the republicans now have the political advantage and would negotiate from strength of the president were to decide the follow the rules that the speaker has set up. the senate minority leader standing firm and the echoed, no tax hikes.

>> it is an eerie similarity year to previous occurrences. take no action. go right up to the deadline and at an 11th-hour negotiations, read my lips. and not interested in an 11th-hour negotiations. keep the commitment we made a year-and-a-half ago to achieve this amount of spending reduction without raising taxes. lou: president obama will address not only domestic issues tonight, north reasserted itself into a foreign policy discussion with its destination of the nuclear bomb. the rogue state testing the bomb underground. the third test testing just over six years. north korea's fledgling dictator showcased his military might. the countries around the world including north korea's closest ally are condemning the north korean government.

fox news chief washington correspondent james rose and as our response. >> the test was conducted in a safe and perfect way of high level with the use of a smaller and like a-bomb. unlike the previous ones year with great explosive power and with all that even the alarming claim about the use of a miniature rise to the clear device which could not immediately be different -- confirmed appear to be true. they went through what u.s. ambassador susan rice called the usual drill. >> we and others have a number of measures we will be discussing with councilmembers in various spheres that will not only tighten the existing measures but we aim to augment the sanctions regime that is already quite strong as implemented in 1874 and 27. >> the numbers and tested prior security resolutions that fail to halt north korea's nuclear march. in washington president obama called south korea's outgoing president while secretary of

state john kerry dialed counterparts. >> for the past year all of us have been sending signals, including china, to the new leaders in the dp arcade, no more than one year-old, that there is another set of choices that could be made. >> the democratic people's -- the democratic people's republic of korea continues to starve its people to feed its nuclear program. the u.s. geological survey recorded a seismic event roughly twice the magnitude of the north second nuclear test back in 2009 >> my sources in south korea tell me that this definition is different. instead of being an experiment, like in the past, it appears to be the north koreans have perfected a operational nuclear weapon. >> this exploded a powerful device, perhaps a major one. clearly within five years, maybe

even three the north koreans will be able to a threat and many american cities. that is ominous. >> a key question still unanswered is of the north's nuclear test was power by reprocessed plutonium, as with its first nuclear test of whether this represents a stunning events in the north's experiment, a program not disclosed until 2010. lou: thank you. fox's chief washington correspondent. my next guest says the nuclear threat from north korea will exist as long as the regime itself exists, joining us now, to analyze the implications of this latest nuclear detonation is the former u.s. ambassador to the united nations, fox is contributor, john bolton. ambassador, good to have you here. the third such test, as they like to call this, they detonated a nuclear bomb, for crying out loud. why in the world is the media and the government solos to call it what it is?

>> it will be a declaration of failure to admit what is going on here, but there is no doubt that this third nuclear test is going to take north korea lot closer to its longtime objective of getting a deliverable -- deliverable the clear weapons capability. the day they put a warhead on top of a missile that can go anywhere on earth is not the time to start worrying about this. the time to start worrying was years ago, but at least we can start now. there is no evidence the obama administration has yet to figure that out. lou: as to the partisan issues, african but those to the side for a moment and look at the reality because there have been failures, republican and democrat throughout the course of this regime path to nuclear power. and it is now a nuclear power, and we need to recognize it as such. what are the options available to the united states in response to north korea which is

basically telling its largest benefactor and principal ally, china, to step aside. >> let's be clear. the clinton administration failed, the bush of ministration failed, the obama administration is failing. it is definitely a 20-year-long bipartisan failure, and the reality is as long as there is enough. there will be north korean nuclear weapons. the chinese could change that, but so far they have shown no inclination to do so. i think realistically the only long-term solution is to find a way to reunify the peninsula peacefully, and i think the key there is china, which we need to be talking to about how to accomplish this. lou: certainly we talk with china all the time and have. >> but not about this. but not about this. lou: we have been talking with negotiations and conducting trade and relationships with china. what could china do year that

would determine a peaceful resolution of their -- of the north korean nuclear aspirations which, by the way, look as though there are very near fulfillment. >> well, look, china supplies 90% or more, 90% or more of north korea's energy. supplies substantial amounts of food and other humanitarian aid. there is simply no doubt china could change what it acknowledges is a real component of instability in northeast asia, and that is a nuclear program. what they are afraid of is that the regime in north korea is so weak that if they applied pressure it will collapse and the peninsula will be reunified under american control. i think we can talk to the chinese about why it is ultimately in their interest to get to a point that will happen someday and make it something that they can live with when career reifies. we had started talking to china two years ago we would be a lot closer. lou: i don't know if they do

this in diplomatic circles, but it just doesn't work. >> never too late to start because right now number three is on the verge of being able to sell that nuclear weapons capability in the work. lou: let me raise my hand, and i understand that, but it still doesn't work, not even in diplomacy or foreign policy. what we are left with is a situation which suggests to you what option available to the obama administration to pursue the u.s. national interest and security of the peninsula. >> in the short term i put north korea back on the list to stay sponsors of terrorism, cut him out of international financial transactions, certainly would not supply any humanitarian assistance which they used to prop up the regime. honestly, you have to look at the longer term solution, and that means you need to find a way to get this regime eliminated. hopefully peacefully by reunifying the peninsula. otherwise, there is every reason to think they're working with ron cilium ballistic missiles

and perhaps on the weapon side as well. that means that these problems are closely related. >> always good to have you with us. much more on the north korean nuclear explosion analysis of the president's upcoming state of the union address tonight. the latest on the california cop killer manhunt throughout this broadcast. china's state oil company cleared to drill, baby, drill in the gulf of mexico. thank you, calls them. the state of the union on the promises president obama will keep. this is $100,000.

wesked total strangers to watch it for us. thank you so much. i appreciate it. i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money? if your bank takes more money than a stranger,e. you need an ally. ally bank. your money needs an ally.

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♪ lou: we await the president's fourth state of the union address now just over an hour

away. former bush adviser brent lachemann, veteran democratic strategist will join this year in moments to give us their analysis and expectations. on wall street today a stocks mixed in front of the state of the union. the dow 47 points, s&p up to, nasdaq fell five and a half. volume, after the close comcast beat earnings targets and announced it would buy the remaining 49 percent of nbc universal it does not already own paying 16 in a half billion dollars, stock sharply higher in after-hours electronic trading. ge selling rockefeller center to typecast, just under one and a half billion. the stock also moving higher as you would expect. gold and crude oil rising slightly today. gold closing at $1,648.70 per ounce. a barrel of crude oil at 9751.

prices fell and yields rose. the treasury to near closing with a yield of just under 2%. the congressional budget office director pressed to evaluate president obama's balanced approach before the senate budget committee today. he told lawmakers, there is no way to evaluate what the president has in mind. >> we have not seen a specific proposal, so i don't know. >> i have not seen as the supposed allies the. it is hard to score espy said the president made, isn't it? >> yes. lou: has projected the u.s. debt could be -- losing their health insurance because of obamacare and the unemployment rate to of remain above seven and a half%. there were able to do all of that. it would make 2014 the sixth year in a row with unemployment so high, along is such time since the depression.

joining us now former deputy assistant to president bush, a veteran democratic campaign strategist. gentlemen, thank you for being here. i should begin with you. first, what does the president say against that backdrop of what is really calamitous empirical performance? >> well, i think he is going to be very aggressive and continued just talk about the unfinished business on the economy and job creation, deficit. he is also going to get a lot of the other issues that he has been talking about coming immigration, gun control. naturally expect this to be a very aggressive speech, and that think it is going to be interesting to see how republicans and their various different response addresses, because there's more than one, how they respond. lou: let's get an early indication and talk to republican near at hand. your thoughts? >> my thoughts are there are

already signals from the white house. we don't have a spending problem. spending a trillion dollars more than we are taking in. an unsustainable entitlement program, yet the democrats have already telegraphed that the president will say tonight, we have to put the pedal to the metal and spend more money. if only we spend more money. we've already spent 800 billion. we know where this is going. we don't have a spending problem as much as we have a lack of confidence in the marketplace. bill clinton says there are trillions of dollars sitting on the side because people don't have a maturity and conference in the marketplace. but is what the president -- unfortunately will telegraph more spending. lou: your heart has got to lead to hear brad blackmun citing president clinton as the source for the $3 trillion sitting of the side awaiting investment, real investment, not just spending and the part of corporate america. >> i think that is there. i think that is on the sideline.

i think the president and democrats -- we believe that the economy is starting to move, not fast enough, but the other point, the president is going to say in his speech tonight that not one of his proposals is going to add a dime of spending, that there is going to be an offset for everything that he talks about and it will be paid for and we have to take the steps to move the country forward. the republicans that will be in the position of saying, no, or compromising in going with the president. i think it's going to have consequences in 2014. lou: when i hear republicans saying is in no. i hear them saying, held no. >> el know it is, and here is the reason. sequestration is hanging over our heads. the president's sequestration, not the house of the senate. this was his way of trying to influence republicans and democrats by putting a hammer to their heads and we're going to call his bluff. mr. president, go ahead. but unless we get the kind of

deal that the americans need any confidence in reducing the deficit and reducing spending, we already gave you your pound of flesh with taxes. to say you're going to spend more in tax more, it ain't going to happen. lou: does the president -- to the democratic leaders, in particular the senate understand republicans this time are playing the role of president obama on the fiscal cliff. the republicans now have the advantage. >> i don't think that's right. i think -- [talking over each other] lou: then they don't recognize that. >> they underestimated them in the 2012 elections. they underestimated his organization. they transferred over organized for america, his campaign apparatus to organize for action which is going to be mobilizing the bottom up, and it will be the people talking to their members of congress, not the president. and we will see other republican party members of the

congressional members reacted that. this is going to be a different kind of second term. i think they're looking to extend out beyond what would be normally the lame-duck process, pushed it out and said the midterms and when the midterms and even have a strong last two years of his administration, which is just anathema to the republican party, but that is what the need to get ready for. lou: what a pretty picture you paint. let you get the last opportunity and picture painting here. >> obama is done. he does not stand for reelection . house and senate members do. there will be acting in their own selfish interest. the president does not have the power rethinks he has and certainly does not have a mandate. lou: to political artists if ever there were. thank you very much. up next, china's state-owned oil company gets the go-ahead completing the communist nation's largest ever foreign takeover, the biggest deal in its history. the canadian based company that its bought has major ties to the

u.s. and our natural resources. senator mark arubia wrote to give the republican response to the president's state of the union rnc chairman joining us to tell us whether this is an audition for something much, much bigger. ♪

♪

♪ lou: this story is a big deal, and it is a story that you won't in all likelihood here reported across much of the national liberal media. the committee on foreign investment in the united states has given the okay to a more than $15 billion acquisition by china's state-run oil producer. the canadian based company, its assets include a number of oil and gas platforms in the gulf of mexico, as you see. they account for roughly 8% of the total crude oil production.

joining me now to talk about what is china's biggest foreign overseas deal yet, director of all technology acquisition for the u.s. army under presidents bush and obama, the code as chair of a nonprofit washington d.c. group, the strategic materials advisory council. good to have you here. i have to say, i was shocked that this was approved without qualification. were you? >> i was shocked beyond belief. putting it into a sequence with a number of things that have happened since election day 2012, we are seeing is a complete reversal in the president's policy. i wish tonight in the state of the union he would address the inconsistency that he had that prior to the national elections he was pro-labor, pro union, pro u.s. manufacturing of upper u.s. industries, defense industries and the like and that it has been one thing after the other

since november 6th. lou: this deal, i mean, the canadians themselves said in december as they approved the acquisition by the chinese overseas oil company, the canadiens announced it would be the last deal of its kind that would be approved by the canadian government, that it was drawing a clear line against state-controlled companies taking majority stakes in the strategic canadian oil sands. this is a huge, huge natural resource acquisition by china in those critical, strategic oil sands. >> and you have to linkage, lou, to what happened in the weeks prior to that, and that we aspire to that china acquired the company that you and i spoke about which gives them the absolute 8-10 year earlier and renewable energy. now, by the acquisition of nixon in canada which, by the way,

gives them offshore oil -- oilfields in the gulf of mexico and puts them right next to a naval air station new orleans, i might add, which is a military and the national security concern, they have also gotten the natural energy supply chain part of this. lou: let's be clear about what the committee on foreign investment in the united states is. it is president obama. it is nothing more than a fig leaf, if you will, for the president's executive an imperial power. it involves the treasury secretary of homeland. we go through the executive departments. nothing more than the president of the united states himself siding is a way. he should do its trade up and boldly, perhaps address it tonight in the city the union. >> all the leaders of the process in every one of the executive agencies are political appointees. in some instances there also

senate confirmed and i hope that in the senate confirmations that come up this week and next that we have a chance to keep asking us questions about why there is this giveaway during this second term of the obama administration lou: let me ask you. why is there this giveaway by this president now? >> i believe that he feels unconstrained and feels that he can repay favors that have been done both in the cynical political world. i also noted that bill daley, is former chief of staff and a representative of ron emanuel were just as of the day of the city is decision made for her a when it to three battery found themselves in beijing and shanghai asking for real estate investments in the city of chicago all very cynical. the quid pro quos, but it does not bode well or spell well for our country. lou: and it is all happening

with that remark -- with our markhor inquiry by the united states congress. thank you very much for being with us. we appreciated. the deal is done. the next deal is where the battle will be done. let's hope that some people are learning something as we analyze what the deal represents to u.s. interest. much more on that deal and the president's state of the union address coming up with the "a-team." ♪ lou: red alert, north korea tells another nuclear bomb. the political fallout. kate upton finds inspiration from an unlikely source weigh down under. rnc chairman tells us why he will hear what he wants to from president obama tonight. ♪

♪ lou: the obama administration wants tighter gun laws to curb gun violence, but and obama appointed u.s. attorney today testifying before congress for the administration had to admit he could not link gun laws to high crime rates. >> i can't say that i know what causes gun violence. i wish we did. there is no more pressing problem to me or my colleagues in the apartment than this, but unfortunately it is a complicated, layered, contextual problem that has so many different factors. i agree with your question, senator, that it is very, very difficult to isolate one cause and tie in very specifically to violent crime rates. lou: the u.s. attorney responding to democratic senator , why he pointed out chicago has among the strictest gun laws in the nation but runaway high crime. in fact, it is the murder capital of the world despite

having that extraordinarily strict gun law. also revealing that out of 80,000 failed background checks last year, the obama administration prosecutors only 44 cases and, yes, he said he was advocating for tougher gun laws despite all that. our next guest says when president obama calls for a balanced approach to debt and deficits, it is code for higher taxes to my part of the republican national committee message and a new web video entitled, when in doubt raise taxes. there must be a lot of doubt because those taxes seem to be going higher. here to talk about this solution to growing our economy, creating jobs to begin the national debt under control, the chairman of the republican national committee. good to have you on the broadcast tonight. you have to be excited for another opportunity to hear the president explain to you what you should know. >> that is an interesting way to lead into the question, lou.

listen -- lou: who said it was going to be a question? >> i think, you know, we have been through this before with the president and that just don't find him to be serious about resolving the problems that are facing this country when it comes to spending, and we on the spending is the issue. here is the deal. he's going to give a good speech. he is a good campaigner. he is an alpha dog campaigner. that is what he does. he talks and talks and talks. unfortunately -- lou: in the ways and he wins and he wins. >> and that's right. listen. that's true. and the question is, though, aside from the wedding and aside from the campaigning, the bigger question facing america is, what are we going to do about the exploding size of government, the exploding spending problem we have in this country. and so it was the republicans that offered to solutions on the sequestered in december. it is paul ryan that, once again

for the third time and wrote is going to offer a budget that cuts spending, it tackles the debt window -- [talking over each other] lou: we had that discussion and we have an election. >> here is the deal. [talking over each other] lou: you were rejected with your deficit busting debt reducing update. lou: and the president prevailed. after eight. >> but that does not mean -- that does not mean -- the president prevailed. and there are a lot of reasons. i don't think one of the reasons the president prevailed is that the american people don't think that we need to start figuring out how to get our spending under control, how to preserve medicare and social security for the future. you are obviously -- that is a pretty apparent fact that the present one. what that means does not mean

that the president has a car blancs piece of paper to do whatever it is you once. the other thing that is true is that the republicans won the majority in the house which means that the president has to deal with -- work with republicans in solving these problems which he is now willing to do. we have an obligation to pass a budget, tackle the spending, and the president has an obligation to work with us. lou: or not work with you. that's a choice. >> or not work with us at eight at eight. lou: the only element in this whole debate that will come to pass on march 1st. i take your point. i, by the way, one to tell you, i was pleased to hear you have a mark of listening tour. we don't hear a lot about republicans listening, and that think we understand you guys got your shellacking in november of last year and i think it's smart. i was -- you know, what do i think of pain during.

suppose to give his response in spanish. you know what, i said i think that's great because the democrats are pandering all the time. it's about time the republicans learned out and go into the field to compete for the minority vote. i just want to say to you personally, gun you. go get it. lou: thank you. look, we can have all of the voter contact in the world, but if it is not quality contact over a long amount of time it will work. we saw is mitt romney ran a pretty good six months operation. the problem is, six months operations don't work so well against for your operations. when you have hundreds and hundreds of people in the community getting to know people across america. [talking over each other] lou: you can not be telling me that the republicans have just figured out that a grass-roots political activism is a very important component of wedding an election.

>> you forget where i come from. i come from wisconsin where is all about the grassroots. we have shown how to win in a blue state. i know all about it. the problem is the when you walk in the door two years ago and you have to dig at the $25 million of debt and you get the iron feed back on track and join in with the presidential campaign for a year, that's not good enough. we have to be sustainable. lou: you're not making excuses year, are you? >> not at all. the main thing is we have to be a coast-to-coast operation for years and years and years, and then and only then do i think you are going to be able to see some of this tide turned in communities across america were you have to ask for the sale, and if you don't you're not going to get it. lou: those elections come around

every two years, and you have to kick butt. we wish you all the best and appreciate you being here. enjoy ek to address tonight. republican national committee chairman. a reminder to gut said loudobbs.com to get the last hour facebook page. up next, the veterans affairs department cooking their books. millions of taxpayer funded phones. i think they committed fraud. we will be talking about that with the "a-team" on their real "state of the union" next. [ roasting firewood ]

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lou: earlier today on the the facebook page-star of yours, selling his padded to the american public amongst the

response , his pet it is test ticket to the american people once again. that was pretty elegant. as of that was pretty depressing. joining us, fox news legal analyst. it sounds like at least in certain quarters we have some pretty reluctant folks where it comes to this president's persuasive powers. will he be able to pivot? >> you're talking about on your facebook page. i would not -- [talking over each other] lou: that hurt. tell ahead and answer any way lila pull myself together. >> quickly, by -- [talking over each other]

common ground and cutting the deficit. the biggest problem that we face long term in this country. the biggest threat to our future a lot of democrats disagree. the president has been following keynesian policies along. now is appointed a recovery when you're supposed to be reducing the deficit to dead and your right to continue to follow those policies. >> how's the president going to reduce the deficit and cut spending when he will offer the same programs again and talk about great energy, investing in education which i believe in him but no child left behind left children behind. we have got to cut spending. the president is still in campaign mode, and that's what you're going to hear tonight. he will demonize republicans and we get the same old same old. >> i think you should be giving a speech after the president. >> no child left behind is george bush's program. [talking over each other]

>> the president wants to talk about more investment in education. >> that is the mitt romney message, so let's keep talking about it. lou: it was a bipartisan piece of legislation. a fellow by the name of ted kennedy was teamed up with president bush to push that legislation that became law. >> i'm not saying i am against it. lou: trying to keep all the little footnotes in history in order. >> we need to revisit. lou: noble and purpose and absolutely destructive and results and idiotic. it should never have been -- >> enacted. lou: education in this country belongs where it has always been best, under local control. lou: you know what, we have not even heard you. >> i've been quiet. lou: we will be right back. an update quickly. wanted for killing three people.

smoke is pouring out of the cabin, as you can see. christopher dorner is believed to be holed up there. we are not sure how the fire originated. not entirely sure what, in fact, -- query is. a shearson official says he stole a vehicle today near big bear lake, abandon it, ran into the forest, barricaded himself, got into a gunfight with law enforcement officers, one of whom he killed in the other is in hospital today, tonight. we're going to have the very latest for you. this is remarkable because the authorities there have moved all the media helicopters out of the way. very few correspondents on the ground that have been committed near enough to know exactly what is happening. that extraordinary men and is now focused on that red cabin. we're coming right back with the

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lou: very quickly, supermodel kate upton taking a place in sports illustrated swimsuit edition history becoming the fifth model to nab two covers of the magazine, also likely the first model to get frostbite during issued since this year's coverage was shot on location in antarctica. if you're wondering how she was able to endure this frigid temperatures it was the penguins. every time she thought about giving up in the cold she would look to the adorable penguins as inspiration. we are back with the "a-team" with you might draw inspiration. i want to go to the president's address tonight continuing on the comprehensive immigration

reform, gun control, all of these issues that crank so far down list. get the deficit under control. >> and as we have been seeing, our payroll, health insurance to all of these things, it has gone wild, and i will tell you one a personal basis as a mom, a single mom of two kids, i am seeing it and that no one my taxes going up anymore. >> and i love my country and my president, but this president is arrogant because it is about what he deems important, what he thinks the american people think is important. he is now looking at the polls, he is putting it on his own agenda. i hope tonight he will talk about gay marriage. we want to hear about the economy. >> the president's speech. he is now being arrogant.

he is giving airport where he thinks america goes. they agree that the economy and reducing the deficit in the debt should dominate the discussion. i'm less sure he agrees with that. >> we are the union. the government by the people, of the people. >> some people think a gun violence is a problem. some people think that women at not being treated as fairly as men is a problem. >> first to jobs, that has to be it because these other things are important, but you have to address the main issue, value succeed. lou: right back with the "a-team" and will have the answers in just a minute.

♪ lou: we are back with "a-team." i want to turn to you. whether it is gun-control, immigration, how much of this is